[bitcoin-dev] Segregated Witness in the context of Scaling Bitcoin

Jeff Garzik jgarzik at gmail.com
Thu Dec 17 18:27:13 UTC 2015

On Wed, Dec 16, 2015 at 5:09 PM, Jeff Garzik <jgarzik at gmail.com> wrote:

> SW presents a blended price and blended basket of two goods.  You can
> interact with the Service through the blended price, but that does not
> erase the fact that the basket contains two separate from similar resources.
> A different set of economic actors uses one resource, and/or both.  There
> are explicit incentives to shift actors from solely using one resource to
> using both.

Illustration:  If SW is deployed via soft fork, the count of nodes that
validate witness data is significantly lower than the count of nodes that
validate non-witness data.  Soft forks are not trustless operation, they
depend on miner trust, slowly eroding the trustless validation of older
nodes over time.

Higher security in one data area versus another produces another economic
value distinction between the two goods in the basket, and creates a "pay
more for higher security in core block, pay less for lower security in
witness" dynamic.

This economic distinction is not present if SW is deployed via hard fork.
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